Standing at 45.6 in March, the headline seasonally adjusted S&P Global UK Construction PMI — an index tracking changes in total industry activity — rose from 44.5 in February but remained below the neutral 50.0 value for the fifteenth month in a row.

In terms of drivers, S&P Global pointed to the war in the Middle East pushing up prices for construction companies while also hampering investment confidence.

Nearly half of the survey panel (48%) reported an increase in their average cost burdens during March, while only 3% signalled a decline.

The resulting seasonally adjusted Input Prices Index pointed to a rapid acceleration in cost inflation, with the rate now at its highest point since November 2022.

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When broken down by sectors, housebuilding activity (index at 38.2) again declined more quickly than civil engineering (44.8) and commercial construction (47.1).

All three sub-categories recorded slower rates of contraction than in February.

However, total new business decreased at the fastest pace for four months in March. Lower volumes of new work have been recorded in each month since January 2025, with the latest reduction attributed to rising risk aversion among clients in response to elevated global economic uncertainty.

Tim Moore, economics director at S&P Global Market Intelligence, said the data suggests a “challenging near-term outlook” for construction.

“The drop in confidence during March wiped out the steady improvements in business optimism reported since the Autumn Budget,” explained Tim.

“Escalating inflationary pressures, gloomy domestic economic prospects and higher borrowing costs were widely cited concerns in March.”